Lynne Kiesling recently wrote a great overview of the elegant complexity and beauty of self organizing free markets. Read it here.
Category Archives: Civilization
Back in April, Stephen Moore wrote about the fundamental economic challenge facing our nation. His title and subtitle explain the core issues:
We’ve Become a Nation of Takers, Not Makers
More Americans work for the government than in manufacturing, farming, fishing, forestry, mining and utilities combined.
It isn’t just government. I’ve been told that here in Rhode Island there are more people working in nonprofit organizations than for profit businesses. We should also consider all the folks collecting social security, welfare or one form or another of government support, as well as all the businesses that subsist on government contracts and subsidies. And numerous private sector jobs are obviously questionable in terms of adding fundamental value to our society. It is truly amazing how many folks our society has to support that aren’t engaged at all in producing the goods we all consume relative to those who do help grow and make things.
Of course our domestic makers don’t do it alone. Makers in other countries are providing most of the manufactured goods we consume in the US as well as many of the raw materials. And we are paying for it all with massive unsustainable levels of private and public debt that will eventually have to be repaid through our own productivity as a society.
We live in an interconnected global economy and as a nation we have to produce goods and services for trade in order to pay for the goods and services we import and consume. Because our nation consumes so much more than we produce, we are experiencing unfortunate realities like real wages stagnating for the last forty years and declining recently.
I do not mean these comments to question or negate the value of the work of people who work in government, in non-profits or in industries outside those that directly produce the goods we consume. Nor do I suggest that we should be less compassionate to retired folks or others who depend on government support. These days I am working in the heavily subsidized field of solar energy and would definitely have to be counted as a taker myself when it comes to our national balance of trade.
We need to recognize that our economy is in the worse crisis since the 1930’s because the path we have been on is completely unrealistic and unsustainable. We have to be more self sufficient as a nation and create more value for export. We can’t possibly keep borrowing to fund consumption without increasing our production. We simply can’t afford to support so many people in our society who don’t help make all the stuff we consume. If we want a healthy economy, we need far more makers.
Moore’s comments on productivity are particularly important. His conclusion might be help point the way toward meaningful solutions in the unemployment debate that politicians in Washington are poised to enter next week:
President Obama says we have to retool our economy to “win the future.” The only way to do that is to grow the economy that makes things, not the sector that takes things.
On Facebook the other day, my friend Jeff Deckman pondered:
Did you know that no one knows how to make a pencil?
Think about it…… A lot of people know how they are made. They can tell you how they are made and can explain the process. But no one person can do all that is needed to be done to make one pencil.
From cutting the tree to milling the lumber to mining the graphite to extruding it in the pencil to extracting and processing the rubber from the rubber trees to making the metal band and assembling it all.
No one person knows how to do that.
We all need one another, no one is unimportant and everyone has a role and it matters. Respect yourself and others. We all have value.
And it doesn’t just apply to pencils………….
Imagine how much time and expense would be involved if we had to hand craft our own pencils rather than buying them for pennies.
My wife Jacqui and I built our previous home, grew much of our own food and heated with firewood that we cut ourselves. I am a recovering worshiper of do-it-yourself independence. I sometimes sit back and wonder at how dependent and grateful I am for my car, computer, and other tools and luxuries that I have no idea how to build or fix, not to mention all the sophisticated tools and dependencies I needed to pretend that I used to be independent.
About three miles from where we live now is Slater Mill, the first textile mill in America and the birthplace of the American Industrial Revolution. Right next to it, at the now historic museum, they have a home of a typical farm family of the time who came to work at the mill. The speed and efficiency of the mill’s very primitive industrial equipment were incredible relative to the spinning, hand knitting and weaving that families did at the time to craft their their own clothes from the flax and wool they grew themselves.
The transformation we have undergone as a society in the last couple hundred years is amazing. The poorest Americans are far wealthier than the richest kings just a few generations ago. The bountiful fruits of interdependent civilization are truly wonderful.
The manufacture of pencils is the subject of a classic treatise on the complex beauty of society naturally organizing in creating the wealth we enjoy though the power of bottom up self-organization of free markets empowered by people making voluntary self interested transactions. “I, Pencil” the 1958 essay by Leonard E. Read is hard to beat.
Hopefully we can figure out how to remain a free and civilized society. It would really suck to have to make our own pencils.